New Tech Gets Battered, Sends Nasdaq Whistling Down as Dow Gains
SAN FRANCISCO -- Amid a lot of background noise, and a day ahead of an expected Federal Reserve rate hike, the bottom line is that the trend evident last week re-emerged today. That is, valuations matter.
It would be a gross oversimplification (as well as an increasingly tired trope) to say Old Economy stocks benefited at the expense of New Economy stocks. Still, the Dow Jones Industrial Average rose 85.01, or 0.8%, to 10,680.24 while the Nasdaq Composite Index shed 187.64, or 3.9%, to 4610.49 -- suffering the third-worst point decline in its history.
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Few Alarm Bells Ring
Despite the Comp's big decline, most traders took a somewhat relaxed attitude about the session. "These are the markets we've been in," said Sam Ginzburg, senior managing director of equity trading at Gruntal. "This is what the Comp does. It's not something that's alarming me." Like many, Ginzburg noted trading volumes were down as many players chose to sit out the action ahead of tomorrow's Fed meeting. In New York Stock Exchange trading, 917.7 million shares were exchanged while declining stocks led advancers 1,569 to 1,381. In Nasdaq Stock Market action 1.5 billion shares traded while losers led 3,029 to 1,293. New 52-week highs bested new lows 45 to 30 on the Big Board while new lows led 116 to 81 in over-the-counter trading. "Tech is not going away but it's going to struggle here because it moved so far so fast," said Robert Harrington, co-head of block trading at PaineWebber. "Valuations are still out of whack." Once the Fed meeting has passed, the focus will return to earnings and growth, the trader said. "Some highfliers will show good growth and revenue and will go up. Some will show things aren't so good" and will continue to suffer. Finally, Harrington noted the Nasdaq is still struggling on a technical basis after having its "upside momentum" broken last week. Last Thursday's intraday low around 4455 will be a short-term focus for market players, he said. Among broader market averages, the S&P 500 dipped 7.84, or 0.5%, to 1456.63 while the Russell 2000 dumped 25.57, or 4.5%, to 549.20. Among other stocks in the news, Lehman Brothers (LEH) fell 4% despite reporting earnings well in excess of expectations. The American Stock Exchange Broker/Dealer Index slid 4% Among other indices, the Dow Jones Transportation Average fell 24.24, or 0.9%, to 2599.59, the Dow Jones Utility Average slid 1.88, or 0.7%, to 288.05; and the American Stock Exchange Composite Index shed 4.73, or 0.5%, to 1106.27. For coverage of today's top stocks in the news, see the Company Report, published separately.>To order reprints of this article, click here: ReprintsTheStreet Premium Services For Personal Service: 877-471-2967
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| Dow Jones | S&P 500 | NASDAQ | 10-Year Note | |
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